South Africa’s Impala Platinum (Implats) said on Wednesday it was in talks to sell its 1 Shaft operation in Rustenburg in a move to make its struggling mines profitable, sending its shares higher.
Implats plans to trim staff by about a third – more than 13,000 jobs – over two years at its labour-intensive, conventional operations in the Rustenburg platinum belt, where its 1 Shaft was scheduled to be put on care and maintenance.
The firm would “remain steadfast” in eliminating high-cost production and was progressing with the initial 1,500 jobs cuts, Chief Executive Officer Nico Muller said in a production update.
“We have progressed the Section 189 restructuring process for 1,500 employees and engaged with parties interested in potentially acquiring the 1 Shaft operation, which is scheduled to be put on care and maintenance,” said Muller in a statement.
Shares in Implats rose 7.99 percent to 2692 rand by 0744 GMT.
“Closing shafts that are no longer viable, are huge drains on their operational expenses, so from that part a pleasing set of numbers and a step in the right direction. From being in a dire situation a year ago they are starting to show signs of life,” said Ryan Woods, market trader at Independent Securities.
Implats said in August it would focus the planned job cuts on its Rustenburg operations, where the number of shafts will be reduced to six from 11, with production cut to 520,000 ounces per annum from 750,000 ounces.
South Africa, home to the world’s deepest mines, supplies 80 percent of global platinum output.
Implats reported an 8.2 percent rise in gross first-quarter refined platinum production to 369,000 ounces, compared with 341,000 ounces in the prior period.
Gross tonnes milled rose 1.9 percent to 6.87 million tonnes, compared with 6.74 million tonnes in the year ago period, boosted by its Impala Rustenburg operations, the group said.